Don’t say I didn’t warn you about this. Google launched a whole new way to treat (or mistreat, depending on who you talk to) search marketers last Wednesday. Of course, the blogosphere was abuzz with speculation in how the new interaction will take place between user, paid placement search results, and oh yes, affiliates.
If it weren’t for brands with a case of affiliate search Schadenfreude (read: laugh while someone else pays to send possibly qualified traffic into my Web site), maybe this would not have happened. Maybe people just got really tired of seeing too many listings for the same site, or maybe there’s some fallout happening from brand “confusion” litigation discussions.
In any case, I decided to get it straight from the horse’s mouth. I caught up with Salar Kamangar, Google’s director of product management, to discuss the big change at Google and what’s on the horizon for advertisers.
What is the primary motivation for the new policy?
Quality is the answer. No matter what you may think about search engines and their eternal quest for almighty shareholder equity, when usability and efficiency suffer you may as well flush the whole thing down Thomas Krapper’s invention.
Kamangar had this to say: “The change is tied to the importance of maximizing ad quality. We proved that we could show more diversity, but do it in a way that brings quality to listings and search results.”
Who gets to bid on what and where?
Simply put, when bidding on a keyword or phrase, multiple marketers will no longer be allowed to bid for position against the same phrase in a public forum. Ownership of keywords or phrases will originate around the domain.
In the “Marriott Hotel” search example above, the two top paid listing marketers would not be allowed to play in the same search result space, but who decides which listing appears?
“We will use a normal bidding system in, if the ads have the same visible URL, the only ad that will be shown is the one with highest ranking,” says Kamangar.
But what about existing advertisers, or even new ones? If you accept the assertion that a duplicate advertiser or affiliate listing is not permitted (and therefore can't be seen by user ranking group), then how does Google qualify which listing will hold sway over the search result?
To summarize the ranking process, Google offered the following expanded explanation:
- A new affiliate advertiser will still be able to compete for an ad impression, even if there is already an established advertiser with the same display URL advertising on the same keyword.
- Advertisers have the ability to improve their ad rank by making adjustments to their creative and/or increasing their CPC.
- If the affiliate has implemented the keyword as a broad match, the keyword will build a historical CTR for terms that may not have other advertisers with a similar display URL competing for the ad impression. This gives the affiliate the ability to improve its ad rank.
- For new advertisers, we assign a click-through rate to the keyword that is based on the overall historical performance of that keyword.
Google’s ranking system is a combination of investment and fortitude, or money and user preference, if you like. According to the AdWords support page, “your ad is ranked on the search results and content pages based on a combination of its maximum cost-per-click (CPC) and clickthrough rate (CTR). The higher your CPC or CTR is, the higher your ad's position will be.”
What are the identifying criteria for each marketer?
Why, the URL, of course. Before I begin to spout a series of detailed explanations in technobabble, here’s the real world, I-am-a-marketing-not-an-information-technology-guy explanation.
“Domain will be identified according to its root architecture,” says Kamangar. “For example, in “news.google.com” the portion that is before and after the dot is of primary concern.”
There will be exceptions to this rule, such as advertisers who use store fronts such as Yahoo! but according to Kamangar the list will be kept under wraps.
All of this is driven by a need for presenting unique content in search results. And, the biggest offenders (or defenders, depending on who’s writing the checks) in the space are affiliates.
How will the interaction with affiliates change?
If you only read my column twice a year, you know that I have some affiliate baggage. Without unloading my luggage into this week’s search vacation, let’s just say the arbitrage scenario will change.
Think of search arbitrage as knowing exactly what a visitor (or click) is worth to someone else and selling it to them while making a tidy profit for yourself. That’s what many affiliates do, and most do it quite well. Affiliates are not stupid. They know exactly how much they can pay and how much a visitor is going to be worth.
But are affiliates simply money grubbing listing mongers?
“There are many cases in which an affiliate can bring value to a user experience and provide useful information,” says Kamangar. “One typical example is one where marketers rely on affiliates to do their marketing [in paid search] for them. The have an incentive to send traffic into the marketer’s site and they understand how to maximize search.”
In the above instance, where a brand has no presence, the affiliate is the only connection to the marketer. The real question marketers should be asking at this point relates to whether or not they should be allowing an affiliate to do that marketing for them, but that is an entirely different discussion.
What other reforms do you see on the horizon?
Other ad quality improvements are in the works. Google has already implemented several enhancements, such as the slightly controversial smart pricing enhancement in which “Google may reduce the cost for a click if that better reflects the value it brings …” Smart pricing identifies pages in which clicks weren’t working.
There is also the ads quality enhancement, which is designed to help broad match get more intelligent. “These implementations are designed to impact meaningful changes for users and advertisers alike,” says Kamangar. “For example, if an advertiser bids on the “Jobs” keyword, results for “Steve Jobs” inquiries will not be returned.”
So what’s next on the agenda? “You can expect to see more keyword technology enhancements,” Kamangar says. “We are applying the techniques we learn in search to advertisements. By doing that, users will keep coming to the site and finding a helpful resource, and advertisers will continue to see the benefit of placement.”
If you have been watching paid search evolve in the past three years or so, it might seem like search providers are simply trading best practices and coming up with neato names for each new policy or procedure to avoid litigation. One site does it and miraculously, six months later the other pops off with a strikingly similar policy.
Overture has been enforcing strict policies on search listing or domain competition for some time. Simply put, an advertiser is not allowed to represent itself as anything other than what is represented in site content. Affiliates with a taste for attempting brand confusion via bidding on terms with brand domains were never really a problem for Overture.
Despite the mass speculation on the impact of Google’s new, ahem, procedure, there are still a few things that simply haven’t changed. Smart practices, like steering your brand in the right direction and wearing the white hat -- both in theory and in practice -- will never change.
The Search Listing Quality Conundrum
10 Tips for Your Affiliate Program
About the Author: iMedia Search Editor Kevin Ryan’s current and former client roster reads like a “who’s who” in big brands; Rolex Watch, USA, State Farm Insurance, Farmers Insurance, Minolta Corporation, Samsung Electronics America, Toyota Motor Sales, USA, Panasonic Services, and the Hilton Hotels brands, to name a few. Ryan believes in sound guidance, creative thought, accountable actions and collaborative execution as applied to search, or any form of marketing. His principled approach and staunch commitment to the industry have made him one of the most sought after personalities in online marketing. Ryan volunteers his time with the Interactive Advertising Bureau, Search Engine Marketing Professional Organization, and several regional non-profit organizations.
Ryan serves as Executive Vice President at the search engine marketing specialist agency, Did-it.Com.